Falling behind on credit card payments can happen fast. A few rough months, an unexpected expense, and suddenly you’re staring at a balance that feels impossible to manage. If you’re searching for what happens if you stop paying your credit cards, this guide walks you through it step by step, and shows you what to expect next.
We’ll explain what happens step by step, how quickly things escalate, and most importantly, what options you still have. The goal here is clarity, not panic. When you understand what’s coming, you can start to take control again.
Article highlights
- Missing payments leads to fees, interest hikes, credit damage, and collections
- Accounts often charge off after six months and may result in a lawsuit
- Jail is not a risk, but wage garnishment is possible through legal action
- You still have options, even if you’re already behind
Credit card debt in America: the scale of the problem
As of 2024, Americans hold over $1 trillion in credit card debt. The average individual balance is more than $6,000, and nearly half of all cardholders carry debt from month to month. Interest rates have climbed past 20 percent for many people, making it even harder to get ahead.
Knowing what happens when payments stop is the first step. This isn’t about scaring yourself, it’s about facing the reality and making better decisions moving forward.
What will happen if you stop paying your credit cards
If you stop paying your credit cards, your account will quickly rack up late fees and interest charges. Within a month, your credit score may drop, and after six months, the account can be sent to collections or result in a lawsuit. The longer you wait, the worse the damage gets.
1. It starts with late fees and interest spikes
When you miss a credit card payment, the first thing that happens is a late fee. This is usually between $25 and $40. If you miss a second payment, your interest rate may jump to what’s called a penalty APR, often around 29.99 percent.
That means your balance grows quickly, even if you never use the card again. A few hundred dollars in missed payments can snowball into thousands over time.
Try our Debt Payoff Calculator to see how quickly credit card balances can grow with high interest.
2. Your credit report will take a hit after 30 days
Once your payment is more than 30 days late, it’s typically reported to the credit bureaus. This can cause your score to drop by 50 to 100 points or more, especially if you had good credit to begin with.
The longer the account goes unpaid, the more severe the damage. A 60-day or 90-day delinquency leaves deeper scars on your credit history. This affects your ability to qualify for loans, rent an apartment, or even get hired for certain jobs.
3. Your account may be frozen or closed
After two or three months of missed payments, your issuer may freeze your card. That means you lose access to your credit line. They may also close the account entirely. At this point, your credit utilization jumps because your available credit drops to zero, even though your balance remains. This can lower your score further.
You will likely start getting frequent calls, letters, and emails asking you to bring the account current. It can feel overwhelming, especially if you’re already under stress.
4. After six months, the account is charged off
At the 180-day mark, most credit card companies will declare the debt a charge-off. This does not mean it is forgiven. Instead, it usually gets sold to a collection agency, which now takes over the job of recovering the money.
A charge-off is one of the most damaging marks on your credit report. It stays there for up to seven years. The collection agency may start calling, mailing notices, and trying to negotiate payment. Some people are able to settle the debt for less than the full amount, but it’s important to get any agreement in writing and understand how it will be reported.
5. Long-term consequences of unpaid debt
Unpaid credit card debt does not just fade away. A collection account and charge-off can block you from qualifying for loans, apartments, or favorable insurance rates. Banks may deny you new accounts or increase your interest rates on other credit lines.
If the collection agency decides to sue and wins a judgment, they may legally garnish your wages, freeze funds in your bank account, or place a lien on your property. This depends on the laws in your state, but it is a real possibility.
The emotional weight is also very real. Carrying debt you can’t pay off creates stress, guilt, and fatigue. It becomes harder to make clear decisions when every phone call feels like a threat.
What won’t happen
There are a few myths worth clearing up:
- You cannot be arrested for credit card debt
- No one can take your belongings without a court judgment
Facing the issue is better than hoping it disappears. Creditors have limits, but so do you. When you understand the line between fear and fact, you can act more confidently.
Things to do if you can’t pay
You may feel like you’re out of options, but that’s not true. Even if you’re behind, there are still ways to slow down the damage or stop it entirely.
Contact your credit card issuer
Many banks have hardship programs. They won’t advertise them, but they exist. You can request reduced interest rates, paused fees, or a payment plan that works with your current budget. If you’ve already missed payments, this conversation can still help.
Speak with a nonprofit credit counselor
Organizations like the National Foundation for Credit Counseling (NFCC) offer free or low-cost help. They can guide you through creating a plan and may help you enter a debt management program. These programs consolidate your payments and may reduce or freeze your interest.
Be cautious with for-profit debt settlement companies
Some of these companies will ask you to stop paying so they can negotiate a lower lump sum. But this approach hurts your credit further and includes high fees. Always get offers in writing and understand the risks before agreeing to anything.
Bankruptcy is still an option
If the debt is unmanageable and you have no realistic way to pay it off, bankruptcy may be the reset you need. Chapter 7 or Chapter 13 can stop collections and wage garnishment, and help you rebuild from a clean slate. It will damage your credit, but it may be better than living in financial survival mode for the next decade.
The bottom line
Stopping payments on your credit cards triggers a fast chain reaction: late fees, rising interest, credit score damage, and eventually collections or lawsuits. That’s how the credit card industry works, and while some parts of it may be somewhat predatory, the truth is that you agreed to the terms when you opened the account.
If you didn’t read the fine print or you spent money without a plan, this is the moment where the consequences show up. It’s a hard lesson, but it’s still a lesson. Take responsibility, face the problem head-on, and start fixing it. No one’s going to rescue you, but you can absolutely recover if you take it seriously.
There are resources that can help like hardship programs, credit counseling, and structured payoff plans. Bankruptcy exists for extreme situations, but for most people, it’s a last resort with long-term damage. Own the mistake, take action, and start rebuilding. You can do it.